Lending in the Pinellas County area

[Lilianna Davitt]

Hi everyone! I work with investors in Florida, and I had some questions regarding lending. I have seen a recent migration towards the Seminole and Clearwater areas that we weren't seeing a year ago. Has this been the same trend for lenders? How differently does lending work in flood zones, with the recent hurricanes in mind? I would assume it is harder... is this true?

Would love any information to be able to pass on!

[J Castro]

Quote from @Lilianna Davitt:

Hi everyone! I work with investors in Florida, and I had some questions regarding lending. I have seen a recent migration towards the Seminole and Clearwater areas that we weren't seeing a year ago. Has this been the same trend for lenders? How differently does lending work in flood zones, with the recent hurricanes in mind? I would assume it is harder... is this true?

Would love any information to be able to pass on!

Great question @Lilianna Davitt — and yes, we’re seeing the similar shift from the lending side.

There has definitely been increased investor activity moving into Seminole, Clearwater, and surrounding Pinellas County areas. With pricing pressure in South Florida and parts of Tampa proper, investors are targeting these markets for:

• Better entry prices
• Strong rental demand
• Solid long-term appreciation potential

From a lending perspective, these areas are still very financeable and active — but the conversation has changed when it comes to insurance and flood risk.

How Flood Zones Impact Lending

Flood zones don’t necessarily make a deal harder — but they do affect cost, leverage, and underwriting.

Here’s what lenders are focusing on now:

1. Flood Insurance is Required (if in a FEMA flood zone)
If the property is in an AE, VE, or other designated high-risk zone, flood insurance will be mandatory — and premiums have increased significantly in some areas.

2. Insurance Cost = DSCR Impact
For rental properties, higher insurance costs directly affect cash flow.
If the debt service coverage gets tight, it could impact:

• Loan approval
• Loan amount
• Required reserves

3. Coastal & Barrier Island Exposure
Some lenders are:

• Reducing leverage slightly
• Requiring higher minimum DSCR
• Limiting exposure in barrier island or high-wind/high-surge areas

But many private and DSCR lenders are still actively lending — the key is making sure the deal supports the higher operating costs.

4. Property Condition Matters More
After the recent storms, underwriters are paying closer attention to:

• Roof age and condition
• Elevation certificates (if available)
• Updated electrical/HVAC
• Prior flood or storm damage

The Reality Today
Flood zones don’t kill deals — but insurance is now the biggest variable investors need to underwrite upfront. The biggest surprises we’re seeing are buyers who didn’t factor the new insurance numbers into their projections.

Best Advice for Investors
Before going under contract:

• Get a flood insurance quote
• Verify wind coverage availability
• Plug real insurance costs into your DSCR or cash flow analysis

The deals still work — but the margins need to be realistic.

 If you need help reviewing a scenario or understanding how insurance and flood zones might affect leverage or loan options, happy to take a look. Best of luck!